Boerne claims immunity in legal fight with LCRA

Updated 10:44 pm, Thursday, February 7, 2013

BOERNE — A judge's ruling Thursday sharply limits Boerne's potential exposure in a contract lawsuit brought by the Lower Colorado River Authority, according to the city's lawyer.

Boerne is among seven retail power providers sued by the LCRA over canceling their wholesale power agreements (WPAs) with it last summer. The LCRA denies its former customers' claims that it treated them unfairly after their decisions to not extend through 2041 contracts that were due to expire in 2016.

After a brief hearing Thursday, Kendall County Court-at-Law Judge Bill Palmer granted the city's plea for jurisdiction, concluding that Boerne is shielded by governmental immunity from the LCRA's declaratory judgment claim.

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Palmer's decision doesn't resolve the litigation because last week the LCRA amended its pleadings here to include a breach of contract claim against Boerne.

But attorney Jose de la Fuente, representing the city, said it limits the potential recovery by the LCRA, which had sought millions due if the contract remained in force.

“They want damages going forward, and the law only allows damages going backward, and there are no past damages since we paid for all of the electricity Boerne used,” he said.

Attorney Steve McConnico, representing the LCRA, disagreed, saying that “future damages are likely to be awarded to the LCRA.”

He noted that Palmer's ruling doesn't square with a recent decision in a related case in Travis County, in which the Boerne lawsuit originated. It was moved to Kendall County.

In that LCRA case, Travis County state District Judge Tim Sulak denied a sovereign immunity claim made by Georgetown.

Both sides are watching an unrelated case involving similar legal issues that the Texas Supreme Court has been asked to review.

The retail power providers accuse the LCRA of discriminatory practices and of violating its legislative mandate and the uniform rate clause in its contracts.

They note that utilities that extended their contracts through 2041 may buy some power on the open market, but the non-renewing customers lost that cost-saving option because of an LCRA policy change in 2011.

The LCRA scored a victory last month when Travis County District Judge Scott Jenkins ruled that it had not violated the uniform rate clause of contracts with Seguin, the Central Texas Electric Cooperative, the San Bernard Electric Cooperative and the Fayette Electric Cooperative.

“Defendants' attempted termination of their WPAs based on a breach of the Uniform Rate Clause was improper,” he said in the ruling that didn't resolve those cases.

LCRA General Manager Becky Motal said, “We have said all along that LCRA did not breach its contracts with those customers because they are all charged the same rate.”

New Braunfels Utilities, which terminated its LCRA contract Jan. 1, sued the authority in July in Comal County.

“LCRA has failed to make any attempt to cure the problems with the current contracts and rates,” NBU Chief Executive Officer Paula DiFonzo said in announcing the termination. “NBU customers are exposed to increasingly higher rates than they should have to pay under the current contracts.”